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While the economic outlook remains uncertain, gold prices seems unlikely to dip significantly: this precious metal is traditionally seen as the “ultimate safe haven”, keeping its value during times of global turmoil.

More specifically, gold prices have been buoyed by increased demand from China. Each time prices tip, China appears to buy buying gold bullion, effectively putting a “floor” on prices. This action would appear to validate the long-held belief of many gold experts that China has fundamentally lost confidence in the US dollar, and is looking to boost gold reserves instead.

And there is also the spectre of inflation on the horizon. Mick Gilligan, the head of research at Killik said: “We are looking at years, not months but there are real fears inflation will be an issue again.” Governments have pumped billion into economies worldwide, in a bid to stave off global depression, creating potential inflationary pressure further down the line. Mr Gilligan adds: “Gold has always been seen as an insurance policy again inflation, as it tends to keep its value when dollars, pounds or euros are losing their buying power in real terms.”

Economists of course, famously rarely agree. And some are still more concerned about the economy heading into a deflationary environment. Perversely, this too is likely to see increased demand for gold, so helping it keep its value.

Stuart Connell, a co-manager on JP Morgan’s Natural Resources fund adds: “There are good long-term and short-term reasons why investors should consider some exposure to gold as part of their portfolio.”

Those most bullish on gold suggest that prices could go as high as $2,000 per ounce. According to the Gold Council prices spiked in the 1980s at $850 per ounce. This is below current spot prices, but if this figure was inflation-adjusted it would be closer to the $2,000 figure.

But John Mulligan of the World Gold Council urges caution in using such calculations. “In the 1980s this was very much a short-lived spike, dictated more by political developments, rather than underlying changes to the gold market.”

This contrasts with the highs reached today. As the graph below there has been a consistent and sustained rise in gold prices over the past decade, driven, according to Mr Mulligan by increased demand, from both private and institutional investors, both in the West and in emerging economies like China and India.

But before investors dive in – a word of warning. Even if gold prices continue to rise, UK investors can still lose money if currency movements go against them. Gold is priced in dollars, so if the dollar weakens significantly against the pound this can wipe out any gains made on rising gold values.

It is also worth bearing in mind that no share or commodity price will keep rising for ever. It isn’t just in the Bible that seven years or plenty are often followed by seven years of famine.

And remember, before the housing bubble burst – or before the technology bubble before that – there were plenty of analysts giving plausible reasons why prices would continue rising further. When gold experts start talking about a “new paradigm” in this market, as many have, investors should tread cautiously.